Business needs a new approach from management education

11 05 2010

Last week, the Academy of Business in Society (EABIS) held its annual Leaders’ Forum at the offices of Suez-Tractebel in Brussels. The Academy is a multi-stakeholder initiative created to stimulate change in the management education industry. Officially founded at an event at INSEAD in 2002 (Ashridge was one of seven founding partner business schools), the initiative now involves a cross section of 71 of the world’s leading business schools, together with over 28 leading companies, including founding corporate partners Shell, Unilever, IBM, Johnson&Johnson and Microsoft. These 28 companies lead the Academy on a simple premise: the context of doing business is changing, new organisational practices are emerging in response, but these need to be accelerated and management education needs to change with changing times to help make this happen – by developing a generation of organisational leaders equipped to navigate in a fast changing, complex and uncertain global society.

The Leaders’ Forum is a select gathering drawing together senior individuals from across the Academy’s members. The day began with a briefing on major global macro-trends, including the limitations in the global financial system exposed by the ongoing series of crises, the social challenges presented by 59 percent of the world’s population living in countries where inequality is worsening, and the rapid pace of ecosystem degradation and climate change. Reflections were then offered from Jan Müehlfeit, Chairman of Microsoft Europe, Sandy Ogg, Unilever Global HR Director and a member of Unilever’s Global Board, and Bruno Berthon, a Global Managing Director of Accenture.

All offered stories of innovation in organisational practices in response. Jan spoke of the huge commercial opportunity for the ICT sector offered by the transition to a low carbon economy, but told us that he had spoken with four European prime ministers during the past week and all lacked the appetite for the pain that would be caused by the public policy actions required to make this happen. Sandy spoke about Unilever’s opportunities for growth from developing commercial solutions to pressing social challenges, and the organisation’s vision of decoupling commercial growth from material consumption. Jan spoke about the need to look beyond GDP as a measure, and Sandy declared that the notion that shareholder value is the sole metric of business is dead.

Bruno offered more stories of organisations responding with new practices – how the automotive industry for example had stopped lobbying to block new environmental legislation and had instead begun seeking competitive advantage from competing to develop the most environmentally friendly vehicles. Bruno noted that success in this new context required new organisational capabilities and a culture of ‘embedded sustainability’, returning to the day’s core theme of the role of organisational learning, management education and culture change. Panel chair Bouwe Taverne of Rabobank cited Ashridge’s recent research, where CEOs had argued that their organisations would benefit from senior leaders who could see the strategic implications of a changing context, who had a personal sense of connectedness and relationship with diverse social networks and communities, and who could effectively navigate complexity and ambiguity through innovation.

After a variety of other fascinating provocations, including research on valuing non-financial performance, the day concluded with a contribution from Wim Vermeir, from the Executive Committee of Dexia Asset Management, giving an overview of the proprietary framework Dexia now uses to factor these issues into asset management. The day also concluded with a public policy perspective from Tom Dodd of the European Commission’s DG Enterprise and Industry.

Tom offered some powerful personal reflections, noting that the time may be coming when we might have to leave behind some collectively held values that we currently hold very dear: for example that the purpose of business is to maximise shareholder value, or that endless economic growth is both possible and necessary. Tom offered the old joke that anyone who believes endless economic growth is possible is either an idiot or an economist.

Tom concluded with a powerful call to all of us: reflecting on Jan and Sandy’s comments on the limitations of GDP and the metric of shareholder value, Tom noted that public policy is ultimately shaped not just by officials but also by the balance of what different stakeholders say, and all of us should therefore put more energy into finding opportunities to voice our perspectives in the mainstream policy-making process. All it will take to reform the system to enable resources to be allocated more sustainably is for enough voices, in public and in private, to echo those of Jan and Sandy.